1) It takes about 700MB of RAM to place Knoppix into it so you should have 1GB to make Knoppix run smooth. 850MB are OK, but you will not be able to run several big programs simultaneously.

2) tohd copies the compressed Knoppix image from the CD to the HDD (and loads the OS from there) - it's not a real installation since you cannot write to this image.

3) fromhd forces Knoppix to load from an image that was previously copied to the HDD. So if you runned Knoppix with tohd once, next time you can use fromhd (to avoid the image being copied to the HDD again - it would be a waste of time).